As climate risk intensifies, some senior executives say the real danger now is a break in trust between clients and insurers.
“Our industry is at an inflection point around trust,” said David Leibl (pictured right), VP sustainability and corporate affairs at Wawanesa, during a recent panel in Toronto.
Leibl argued that insurers are being pulled into the centre of a growing storm: communities hammered by wildfires, floods and smoke; governments struggling to fund resilient infrastructure; and policyholders unsure where their safety net really begins and ends.
“Canadians aren’t necessarily fully clear on where our responsibility or our obligations as insurers starts and ends, and we’re trying to figure that out… in real time,” he said.
That ambiguity, he suggested, is dangerous. As climate‑driven losses mount and underwriting decisions get tougher, it risks fuelling the perception that insurers are quietly retreating just when people need them most.
Part of the problem, Leibl admitted, is that the industry itself set the wrong expectations for decades.
“If we look at how we as an industry have engaged Canadians in the 130, 140 years since there’s been a structured insurance sector in this country, our whole value proposition has largely been, if a bad thing happens to you, we’re going to be there for you, and there was no caveat or asterisk attached to that,” he said.
Yes, carriers have offered discounts for backwater valves or leak detectors here and there, but there has never been a systematic, sector‑wide conversation with Canadians about prevention, shared responsibility and what resilience actually looks like.
“Have we had that structured conversation with Canadians around resiliency and how we need to effectively shift what insurance is from more of a reactive posture to a preventative one? No, we haven’t had that conversation at all,” Leibl said.
From a consumer’s point of view, he conceded, that history makes their current frustration entirely understandable.
“I think it’s very fair for Canadians to say, this is what I’m paying a premium for. This is your guys’ job – you look after this,” he said.
The trouble is that in a world of compounding climate shocks, that neat division of labour – you pay premiums, we absorb the risk – simply no longer holds.
“Of course, that doesn’t work, because insurers can’t bear the entire risk in the face of this change,” Leibl said.
For carriers like Co‑operators and Wawanesa, climate resilience has moved from the CSR fringe into the centre of business strategy.
Leibl described how, not long ago, resilience work sat “firmly in the column of the nice to do,” somewhat peripheral to the core book. That’s no longer the case.
“We’re now seeing a significant rotation of insurers recognizing this is a direct existential threat to what they do and to the people that they serve,” he said. “We’re also seeing climate resilience emerge as a competitive space within the insurance sector. I think that’s good.”
Chad Park (pictured centre), VP sustainability and citizenship at Co‑operators, said his organisation has already moved more than 20% of its investable assets into climate solutions, with a growing focus on adaptation and resilience, not just emissions reduction. But he stressed that none of this is charity.
“We do so without sacrificing the financial return, which is always a key message to deliver to our board,” he said. Much of Co‑operators’ capital is going into climate‑related infrastructure and community‑level projects that should, over time, reduce losses and strengthen the long‑term viability of the business model.
Wawanesa, meanwhile, has effectively upended its community‑giving strategy. Where the mutual once “gave to everyone,” Leibl said it made a deliberate decision to channel most of its philanthropic and community dollars to organisations on the front lines of climate change.
“The hard choice is going to be to say no to a lot of other organizations and to direct the majority of our dollars… to organizations on the front lines of climate change,” he said. The next step, he added, is ensuring those dollars translate into measurable reductions in risk for their own members.
Both executives argued that rebuilding trust will require insurers to rethink their role – and start engaging policyholders as partners in resilience, not just claimants.
Park noted that Co‑operators has begun embedding certain resilience features into base policies at no extra premium, rather than selling them as optional add‑ons. In his view, if measures like climate‑resilient rebuilding are always presented as an extra cost, uptake will be low and the protection gap will widen.
“If resilience measures… are presented to the market in a way that they have to pay extra for it, then it’s likely not going to be taken up very much,” he said. That’s part of why Co‑operators decided to fold some of those features straight into standard coverage: a signal that prevention is now part of the core value proposition, not a bolt‑on.
For Leibl, the deeper challenge is restoring the sense that policyholders and carriers are on the same side of the table.
Looking back at early Wawanesa advertisements, he said, policyholders were engaged almost as co‑owners in the resilience project. The message then was that the flip side of the right to make a claim and “have us pay it in full” was a responsibility to take reasonable actions to prevent loss – both for themselves and for fellow insureds.
“Over the years, we’ve moved away from that,” he said. “Maybe we need to go back to that and have that discussion about the needs and responsibilities of the insured.”
